Vladimir Ilyich Lenin

NOTEBOOK “β”

E. AGAHD,BIG BANKS AND THE WORLD MARKET

E. Agahd—St. Petersburg.Big Banks and theWorld Market.

“The economic and political significance of the big banks in the world

market from the standpoint of their influence on Russia’s national economy

and German-Russian relations.” Berlin, 1914. Preface dated:May 1914.

“The Paris banking trio, with assets of several thousand million francs, and with Russia as its chief market, controls the following Russian banks: (1) the Russo-Asiatic Bank, (2) the St. Petersburg Private Bank, (3) the Union Bank, and has introduced on the Paris stock exchange the shares of some industrial concerns that are closely connected with these banks” (55)....[1]

“In 1907-08 we already see Russian capital flowing back, bringing with it new international capital” (59).

“However, the total amount of ‘panic-struck capital’ must have been much larger.

“The current rate of Russian 4 per cent Consols was quoted as follows:

and, according to data of the Credit Office, dividend payments changed as follows:

“These figures, of course, do not allow of an absolutely certain conclusion because current security prices varied considerably and ruble encashment in Russia could often have been advantageous.

N.B. The author, of course, is an arch-bourgeois and nationalist in his political sympathies!

“In fact, the number of bills protested at that time rose only slightly, which caused the more surprise in financial circles of the continent, the less the contemporary (peasant) movement was understood” (66).

Bills of Russian banks protested, according to balance-sheets of November 1, 1905 and following years (p. 66):

How does the Deutsche Bank place shares of the Siberian Commercial Bank in Berlin?

“so that a ‘German’ big bank comfortably and rapidly makes a profit (on the market price)”...  (74).

“Statistically, from the German standpoint, the operation appears as follows:

“Increase of capital since 1906-07:

Increase of Capital, million rubles (p. 84)

“At that time (1911) the Russian Credit Office [N.B.: in other passages: its directorDavydov] gave the Russian banks, for stock-exchange operations in Paris and Peters burg, first 120 million francs and later a further loan, altogether about 100 million rubles, to subsidise the wild banking speculations which had reached a deadlock (the official designation was: for stabilising the market price of Russian state securities)”... (86).

p. 121: ...in1912the Russian commercial banks altogether had548branches....

The growth of “mutual credit societies” (p. 122)

This in Chapter 11: “The Merger of the Russo-Chinese Bank with the Northern Bank (Russo-Asiatic Bank) and the Protest against This at the 1910 General Meeting” (p. 147):

(the protest was moved by the author himself)

The author registered a“dissenting opinion“,entered in the minutes of the meeting of March 30, 1910 (p. 154).

“The holdings system is nonsense”—the author argued in his protest... (p. 154).

A “merger” was carried out by the French banks (Banque de Paris et des Pays Bas + Société Générale) which were “interested” in the Russo-Chinese Bank, saw its affairs were in a bad state, wanted to “extricate” themselves andhoped

The union of deposit and speculative banks is harmful because it

(1) “ties up” the country’s productive means

(2) leads to a rise in prices, syndicates, etc.

The Credit Office... “is the keyboard controlling all credit activity in the Empire”. “It is a bureaucratic apparatus without a statute and without public control” (200).

...“In 1910 it was ... reformed and since then its task has been to ‘co-ordinate’ the activities of all the credit institutions of the country,[8]and ‘it is the connecting link between these and the Stock Exchanges’”....  The St. Petersburg banks report to it every eight to fourteen days, and in more detail every three months (201).

Four “modes” of these subsidies[9]:

“Balance-sheet showing strength of the St. Petersburg banks (system of holdings)” (p. 211).

{Table in full on pp. 211-12.}

“The strength relation of the three foreign groups of banks is:

...“On the other hand, the division of material liabilities (all in nominal values) is:

“The clear meaning of these statistics of proportions is that the one-third minority of capital-exporting countries dominates the two-thirds majority of Russia as a capital-importing country (p. 213), and, moreover, in such forms (subsidies, syndicates, cartels, etc.) that this minority can protect neither its own interests nor those of others. In consequence of this, last but not least,[11]the private interests of a few boards of big banks dominate, not officially but secretly, and in such a way that all concerned suffer.”

On p. 214 he gives the followingofficial statistics from the Torgovo-Promyshlennaya Gazeta:

On the question of Russia’sbalance of trade, the author writes that the excess of the credit over the debit side was

“Concerning this sum, therefore, it can be said that it has in part (I put it at 500 million rubles) more than normally enriched the country in cash resources thanks to especially good harvests. But this figure proves, plainly and obviously, that the apparently gigantic upswing in Russia was by no means due only to favourable harvests.

“To this must be added the import of capital under guaranteed and private stock issues of about 1,509 million rubles, of which, however, only a negligible amount was put on the market in the form of cash (most of it went into special undertakings).

The growth, he says = about 2,500 million rubles, and import of capital about 1,600 + 771 (inflow due to good harvests) = 2,371 million rubles (p. 239)—“they approximately balance”....

This is how the author criticises Witte’s financial policy:

“Then, too, they [Witte] went in for speculation and combinations and shifted the risk on to the Treasury, instead of properly organising things” (275)....

That “my” (Agahd’s) “programme” should be “un-national”??  God forbid!! I am not a cosmopolitan, I am a nationalist (pp.287and288), I am for the independence of every nation, for good banking, for successful “deals”.

and the last phrases in the book:

[1]See present edition, Vol. 22, p. 231.—Ed.

[2]See present edition, Vol. 22, p. 232.—Ed.

[3]Ibid., p. 232.—Ed.

[4]Ibid p. 232.—Ed.

[5]See present edition, Vol. 22, p. 232.—Ed.

[6]See present edition, Vol. 22. p. 231.—Ed.

[7]See present edition, Vol. 22, p. 238.—Ed.

[8]Ibid.—Ed.

[9]Subsidies of the credit office.—Ed.

[10]See present edition, Vol. 22, p. 232.—Ed.

[11]These four words are in English in the original.—Ed.

[12]So given by Agahd.—Ed.